News

26 Apr 2015 3:58 PM |
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Panera Bread founder and CEO Ron Shaich says that maintaining competitive advantage is his top priority as a leader.
"If we don't have a reason for people to walk past competitors and come to Panera, then we don't exist," Shaich tells Business Insider. "Losing competitive advantage is the greatest risk in business, and that's where our focus is."

In 1981, Shaich oversaw just four cafe locations in the Boston area. Over the years and after several iterations, Panera has grown to nearly 2,000 locations in the US and Canada, 80,000 employees, and a market capitalization of $4.5 billion.

But, as any business grows, it gets harder to maintain competitive advantage.

When a company first starts out, it's full of what Shaich calls "discovery people," or folks that are always trying to figure out "where the world is going."

As a company matures, "delivery people" begin to take over, he says. They focus on "limited risk" and sustaining the business, and stick to the language of "what happened yesterday."

The key, Shaich says, is to never let that get out of balance, so that you don't wake up one day and realize that the company has become exclusively "delivery" and not at all "discovery."

"I view my role as CEO as protecting those that discover ways to build competitive advantage," Shaich says. "Our job as leadership is to protect and enable leaps of faith, making sure the company is there when the future arrives."

23 Apr 2015 4:16 PM |
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Solid employment gains, attractive mortgage rates, a growing economy and pent-up demand will help keep the housing market moving forward throughout 2015 and into next year, according to economists who participated in yesterday’s NAHB 2015 Spring Construction Forecast Webinar.

“This should be a good year for housing, buoyed by sustained job growth, rising consumer confidence that is back to pre-recession levels and a gradual uptick in household formations,” said NAHB Chief Economist David Crowe. “We expect 2016 to be even better, due to a significant amount of pent-up demand and an economy that will be entering a period of reasonable strength and consistency.”

Over the past seven years, Crowe estimates the slow recovery and uncertainty in the job and housing markets resulted in 7.4 million lost home sales. “While some of these sales will never take place, this does indicate how many sales were lost as fewer households decided to move. We expect at least some of these to return in the form of new home sales as job and economic growth continue to firm.”

A key demographic to help jump-start this process should come from the millennials.

The share of first-time home buyers has traditionally averaged around 40% but in the aftermath of the housing downturn it now stands at just under 30%. First-time buyers are expected to provide a boost to the housing market, as the unemployment differential between young people and others is shrinking, Crowe noted.

Single-Family on the Rise

Turning to the forecast, the NAHB Remodeling Market Index, which averages ratings of current remodeling activity with indicators of future activity, stands at 57 in the first quarter of 2015 and has been at or above 50 most of the past two years. A reading above 50 indicates that more remodelers report market activity is higher (compared to the previous quarter) than report it is lower.

NAHB is projecting that residential remodeling activity will increase 2.3% in 2015 over last year and rise an additional 2.4% in 2016.

Single-family housing production is expected to post a 9% gain in 2015 to 704,000 units and jump an additional 39% to 977,000 units in 2016.

On the multifamily side, production ran at 355,000 units last year, which could be considered a normal level of production, and is expected to continue in that range or modestly higher through 2015 and 2015.

New Home Price Growth Fastest in Coastal Areas

Focusing on new home sales, Sam Khater, deputy chief economist at CoreLogic, said that sales volume is weak, but pockets of strength exist.

“New home price growth is fastest in the coastal states and eight of the top 10 healthiest new sale markets are in the Carolinas and Texas,” said Khater.

Of the top 100 new-home sale markets, Houston leads the pack at 2,000 sales per month, followed by Dallas and Atlanta, which are running at about half that pace. In terms of volume, the bulk of the concentration is in southern markets.

“Nashville and San Jose stand out as the fastest growing markets and Atlanta and San Antonio are the best large markets,” said Khater.

Only three new-sale markets are larger today than in 2000 – Nashville, Oklahoma City and San Antonio.

“We Really Have Turned the Corner”

Also delving beneath the national numbers, NAHB Senior Economist Robert Denk said that the housing recovery continues to vary by state and region.

“Housing demand is now being driven by population growth and employment and income growth,” said Denk. “We are reconnecting to underlying fundamentals. We really have turned the corner.”

The strongest housing markets are centered in several energy-producing states, including North Dakota, Texas, Oklahoma, Louisiana, Wyoming and Idaho.

“The recent decline in oil prices is not hurting housing,” said Denk. “We haven’t seen it yet. We still expect energy output to be higher at the end of this year than last year.”

Other states exhibiting strong employment and housing growth include North Carolina, South Carolina, Tennessee, Washington and Colorado.

Using the 2000-2003 period as a healthy benchmark when single-family starts averaged 1.34 million units on annual basis, NAHB is projecting that single-family production, which bottomed out at an average 27% of normal production in early 2009, will rise to 61% of normal by the fourth quarter of this year and climb to 81% of normal by the end of 2016.

In another way of looking at the long road back to normal, by the end of 2016, the top 40% of states will be back to near normal production levels, compared to the bottom 20%, which will still be below 75%.

“What we are seeing, no matter what bucket you are in, the numbers are getting better,” said Denk. “There’s a broader recovery all around.”

02 Apr 2015 11:57 AM |
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Millennials Seek Smaller Houses, But Won’t Sacrifice Details!

29 Jan 2015 8:46 PM | Anonymous

As Millennials begin to enter the home buying market in larger numbers, homes will get a little smaller, laundry rooms will be essential, and home technology will become increasingly prevalent, said panelists during an International Builders’ Show press conference on home trends and Millennials’ home preferences held last week.

NAHB Assistant Vice President of Research Rose Quint predicted that the growing numbers of first-time buyers will drive down home size in 2015. Three million new jobs were created in 2014, 700,000 more than the previous year “and the most since 1999,” Quint said. At the same time, regulators have reduced downpayment requirements for first-time buyers from 5 percent to 3 percent and home prices have seen only moderate growth.

“All these events lead me to believe that more people will come into the market, and as younger, first-time buyers, they will demand smaller, more affordable homes,” Quint said. “Builders will build whatever demand calls out for.” Quint also unveiled the results of two surveys: one asking home builders what features they are most likely to include in a typical new home this year, and one asking Millennials what features are most likely to affect their home buying decisions.

Of the Top 10 features mentioned by home builders, four have to do with energy efficiency: Low-E windows, Energy Star-rated appliances and windows and programmable thermostats. The top features: a master bedroom walk-in closet and a separate laundry room.

Least likely features include high-end outdoor kitchens with plumbing and appliances and two-story foyers and family rooms. “Consumers don’t like them anymore, so builders aren’t going to build them,” Quint said.

When NAHB asked Millennials what features fill their “most-wanted” shopping list, a separate laundry room clearly topped the list, with 55 percent responding that they just wouldn’t buy a new home that didn’t have one. Storage is also important, with linen closets, a walk-in pantry and garage storage making the Top 10 – along with Energy Star certifications. In fact, this group is willing to pay 2-3 percent more for energy efficiency as long as they can see a return on their power bills.

If they can’t quite afford that first home, respondents said they’d be happy to sacrifice extra finished space or drive a little farther to work, shops and schools, but are unwilling to compromise with less expensive materials.

A whopping 75 percent of this generation wants to live in single-family homes, and 66 percent of them prefer to live in the suburbs. Only 10 percent say they want to stay in the central city. Compared to older generations, millennials are more likely to want to live downtown, but it’s still a small minority share, Quint said.

Panelist Jill Waage, editorial director for home content at Better Homes and Gardens, discussed Millennials’ emphasis on the importance of outdoor living and that generation’s seamless use of technology, and how those two trends play into their home buying and home renovation decisions.

Because they generally don’t have as much ready cash – or free time – as older home owners, Millennials seek less expensive, low-maintenance choices like a brightly painted front door, strings of garden lights, and landscaping that needs less watering and mowing, like succulent plants and larger patios.

They’re also very comfortable with their smartphones and tablets, and increasingly seek ways to control their heating and air-conditioning and security and lighting as well as electronics like televisions and sound systems from their phones. “They want to use their brains for other things, not for remembering whether they adjusted the heat or closed the garage door,” Waage said.

02 Apr 2015 11:54 AM |
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ORMOND BEACH - Local builders Scott Vanacore and his brother Todd are set to begin development of a 160-home "golf villa" subdivision here that will consist of what they describe as luxury duplexes.

The planned 20-acre Scottsmoor development will be in the section P area of Ormond Beach's Halifax Plantation community, off of the 278 exit of Interstate 95.

The brothers, who own Ormond Beach-based Vanacore Homes, decided to develop the luxury duplexes because of the success they've had in developing their 75-home Tramore atHalifax Plantation subdivision, which is nearly sold out and built after just two years, Scott Vanacore said.

"We've been very successful selling those homes," he said, adding that 70 percent of the buyers at Tramore have been locals. "Our plan at Scottsmoor is to take a similar product and just glue two of them together," he said.

The first of the duplex units at Scottsmoor should be ready for occupancy later this year, Vanacore said. Site work is scheduled to begin this week. Construction of the subdivision's model home/sales center could start in three to four months.

"Halifax Plantation has a variety of product types. Todd andScott are smart guys and have probably done their homework on the demographics," said local observer Skip Stamper, a real estate broker who owns Halifax Area Properties in Ormond Beach. "Baby boomers are still retiring here and some snowbirds like the idea of locking and leaving and not having to worry about living in a condo. They are able to have privacy in a home and with a garage. I expect (Scottsmoor) to do well." The Vanacores, under the name Scottsmoor Investors LLC, are paying $1.5 million to Halifax Plantation Inc. for the land along Acoma Drive that will become the site of their planned subdivision. Development will be in two phases.

Vanacore said the entire project is expected to cost $4.2 million to develop including land costs. He said he and his brother plan to spend the next four to five months on infrastructure improvements.

Duplex units will be available for purchase starting in the high $180,000s and will include luxury features such as "handscraped wood flooring, 42-inch wooden cabinets and granite countertops," Vanacore said. The homes will have two-car garages and will either back up to a pond or the golf course.

Scottsmoor will include an amenities center where residents can play pickleball, shuffleboard or bocce ball, he said.

Brothers Scott, left, and Todd Vanacore plan to bring in heavy equipment this week to start developing Scottsmoor, a 160-unit luxury duplex subdivision in the master-planned Halifax Plantation community in Ormond Beach.